Write off provision for bad debts
This query is : Open
12 April 2010
We passed a entry for Doubtful Debts provision last yr i.e.
Bad & Doubtful debts Dr
To Provison for Bad Dets Cr.
Now we want to write off this prov mean these are complety bad debts.What exact entries i have to pass in accounts.
Bad & Doubtful debts Dr
To Provison for Bad Dets Cr.
Now we want to write off this prov mean these are complety bad debts.What exact entries i have to pass in accounts.
CMA.Palani Arumugam
(Expert)
12 April 2010
Provision for bad debts a/c. dr
To Party A/c.
To Party A/c.
shakuntala chhangani
(Expert)
14 April 2010
Dear Akhilesh, the provision for Bad and doubtful debts is always made through P/L A/c by passing the entry :
P/L A/c Dr.
To RDD A/c
If the debt is bad then only we pass the entry in debtors A/c as:
Bad debts A/c Dr.
To Party A/c
for doubtful debts, entry can not be passed in debtors A/c as it is made on estimated basis on total amount of debtors outstanding.
Regards, CA Shakuntala Chhangani
P/L A/c Dr.
To RDD A/c
If the debt is bad then only we pass the entry in debtors A/c as:
Bad debts A/c Dr.
To Party A/c
for doubtful debts, entry can not be passed in debtors A/c as it is made on estimated basis on total amount of debtors outstanding.
Regards, CA Shakuntala Chhangani
16 April 2010
I think entries should be like
Prov for Doubtful Debts Dr.
To Prov. no longer required Cr.
Bad Debts Dr.
To S. Debtors Cr.
Because for Income Tax purpose prov are fully disallowed, hence when bad debts actually occured, entry no 1 is passed
Prov for Doubtful Debts Dr.
To Prov. no longer required Cr.
Bad Debts Dr.
To S. Debtors Cr.
Because for Income Tax purpose prov are fully disallowed, hence when bad debts actually occured, entry no 1 is passed
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